Atiles-Gabriel v. Commonwealth

• Decision Date: 23 June 2017
• Docket Number: CIVIL NO. 15-2108 (GAG).
• Citation: 256 F.Supp.3d 122
• Parties: Julio A. ATILES–GABRIEL, Petitioner, v. Commonwealth of PUERTO RICO; and Edward Garcia–Soto, Warden, Puerto Rico Department of Corrections and Rehabilitation, Respondents.
• Court: U.S. District Court — District of Puerto Rico

256 F.Supp.3d 122

Julio A. ATILES–GABRIEL, Petitioner,

v.Commonwealth of PUERTO RICO; and Edward Garcia–Soto, Warden, Puerto Rico Department of Corrections and Rehabilitation, Respondents.

CIVIL NO. 15-2108 (GAG).

United States District Court, D. Puerto Rico.

Signed June 23, 2017

Andrew S. McCutcheon, Eric A. Vos, Federal Public Defender's Office, Hato Rey, PR, for Plaintiff.

Rafael B. Fernandez Castaner, Department of Justice, San Juan, PR, for Defendant.

MEMORANDUM AND ORDER

GUSTAVO A. GELPI, United States District Judge

This case involves a petition for writ of habeas corpus under 28 U.S.C. § 2254 brought by Julio A. Atiles–Gabriel ("Atiles–Gabriel") against the Commonwealth of Puerto Rico ("Commonwealth") and Edward Garcia–Soto, the Warden of the Puerto Rico Department of Corrections and Rehabilitation ("Warden") (collectively, "Respondents"). (Docket No. 2.) Through this section 2254 petition, Atiles–Gabriel, who is currently serving a 144–year prison term, seeks collateral review of the constitutionality of his conviction and sentence by the Commonwealth.¹

I. Factual and Procedural Background

On August 15, 2015, Atiles–Gabriel filed a petition for writ of habeas corpus pursuant to 28 U.S.C. § 2254. (Docket No. 2.) Section 2254 grants federal courts the authority to entertain a habeas petition brought by an individual in state custody, pursuant to a state court judgment, on the basis that the individual is in custody in violation of the United States Constitution or federal law. 28 U.S.C. § 2254. Atiles–Gabriel tethers his due process constitutional claims to ineffective assistance of counsel and actual innocence. (Docket No. 2, 6.) The Court appointed the Federal Public Defender ("FPD") to represent the Atiles–Gabriel and ordered the FPD to assess the viability of the petition. (Docket No. 4.) The FPD recommended that the petition was viable, and Respondents were subsequently served. (Docket Nos. 6, 8.)

On May 3, 2017, before Respondents filed an answer to the petition, Puerto Rico declared bankruptcy pursuant to the provisions of PROMESA and filed a petition under Title III of PROMESA to adjust its debt obligations. In re Commonwealth of Puerto Rico, No. 17–3283 (LTS) (D.P.R. filed May 3, 2017).

On May 30, 2017, the Commonwealth filed a Notice of Automatic Stay in this case. (Docket No. 34.) The Court denied the stay, reasoning that the stay does not apply to petitions for habeas relief. (Docket No. 35.) Thereafter, the Commonwealth moved to dismiss and also moved to clarify the legal basis for the Court's denial of the Notice of Stay. (Docket Nos. 36, 37.) On June 16, 2017, Atiles–Gabriel responded, arguing that this habeas petition is not stayed by the Commonwealth's Title III case under PROMESA. (Docket No. 39.)

II. Discussion

The Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"), see 48 U.S.C. §§ 2102 – 2241, is a bankruptcy-like statute enacted by Congress and signed into law in June 2016 to help address the insolvency of the Government of Puerto Rico. See generally Peaje Inv. LLC v. García–Padilla, 845 F.3d 505, 509 (1st Cir. 2017) (discussing the statute's purpose). PROMESA establishes a Financial Oversight and Management Board ("the Board") to "provide a method for the covered territory to achieve fiscal responsibility and access to the capital markets." 48 U.S.C. § 2121. Title III of PROMESA creates a mechanism to allow the Board to restructure and adjust the Commonwealth's debt obligations. §§ 2161–2177 (hereinafter "Title III"). Title III incorporates by reference many sections of the Bankruptcy Code, including 11 U.S.C. § 362 and 11 U.S.C. § 922, which provide for an automatic stay upon the filing of a bankruptcy restructuring petition. § 2161(a).

Respondents now seek to avail themselves of Title III's automatic stay, incorporated by reference to section 362(a) and 922(a) of the Bankruptcy Code, in this habeas case. Section 362(a)(1) provides an automatic stay applicable to "the commencement or continuation" of "a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before commencement of the case under [Title 11], or to recover a claim against the debtor that arose before the commencement of the case under [Title 11]." 11 U.S.C. § 362(a)(1). Similarly, subsection 362(a)(6) automatically stays "any act to collect, assess, or recover a claim against the debtor" arising before the petition.² The section 362(a) stay is extraordinarily broad: it protects the debtor from nearly any act to collect a prepetition claim and any action affecting the property of the debtor's estate, subject only to section 362(b)'s narrow exceptions. See 3 Alan N. Resnick et al., Collier on Bankruptcy¶ 362.03 (16th ed. 2017); see also § 362(b) (excepting from the automatic stay criminal proceedings, domestic support obligations, certain property actions, and actions by a governmental unit to enforce its police and regulatory power, among many others).

Section 922(a), which applies to adjustment of the debts of a municipality, provides an automatic stay applicable to "the commencement or continuation" of "a judicial, administrative, or other action or proceeding against an officer or inhabitant of the debtor that seeks to enforce a claim against the debtor." 11 U.S.C. § 922(a). Section 922(a) supplements, but does not supplant, section 362(a). Section 922(a) applies to both prepetition and post-petition actions. See In re Jefferson Ctny . , Ala., 484 B.R. 427, 447–49 (Bankr. N.D. Ala. 2012) (reasoning that the absence of limiting language in section 922(a)(1) means the section's "reach is not limited to just pre-bankruptcy claims"). However, like much of section 362(a), it only applies to actions that seek to "enforce a claim" against the debtor. Compare § 362(a)with § 922(a).

In section 101(5),³ the Code defines "claim" as a:

(A)right to payment, whether or not such right is reduced to judgment, liquidated unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or

(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.

11 U.S.C. § 101(5). Under section 101(5)(A), a "claim" is a right to payment—no matter the form. Under section 101(5)(B), a "claim" is a right to an equitable remedy—no matter the form—so long as "a monetary payment is an alternative for the equitable remedy." Rederford v. U.S. Airways, Inc., 589 F.3d 30, 35–36 (1st Cir. 2009) (citations omitted). The statute's text makes clear that a claim concerns "an ultimate right to payment." In re City of Stockton, 499 B.R. 802, 806 (Bankr. E.D. Cal. 2013). This aligns with Congressional intent—the term claim was given the "broadest available definition." F.C.C. v. NextWave Pers. Commc'ns, 537 U.S. 293, 302, 123 S.Ct. 832, 154 L.Ed.2d 863 (2003) (quoting Johnson v. Home State Bank, 501 U.S. 78, 83–84, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991) ).

The statutory definition of "claim" does not include a petition for writ of habeas corpus within its scope. A habeas petition seeks to vacate, set aside, or correct the petitioner's judgment or sentence. 22 U.S.C. § 2254. The relief sought concerns a person's liberty; it does not seek a right to payment, nor an equitable remedy for which monetary payment is an alternative remedy. See § 101(5)(A)-(B). Thus, section 922(a) and 362(a)(6) are inapplicable to a habeas petition, because those automatic stay provisions apply to enforcing or recovering a "claim" and a habeas petition is not a "claim" within the meaning of the statute.

If Title III stays habeas proceedings, it must be as a result of section 362(a)(1). Statutory interpretation begins—as one might expect—with the text of the statute. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) (citations omitted). "If the statute's language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms." In re Rudler, 576 F.3d 37, 44 (1st Cir. 2009) (internal citations and quotations omitted). Thus, plain meaning should only apply if the language is not ambiguous and would not "lead to absurd results." In re Fahey, 779 F.3d 1, 11 (1st Cir. 2015) (Thompson, C.J., dissenting) (quoting In re Rudler, 576 F.3d at 44–45 ).

Section 362(a)(1) operates as a stay of "a judicial, administrative, or other action or proceeding against the debtor ... or to recover a claim against the debtor ...." 11 U.S.C. § 362(a)(1). The statute includes two clauses describing the types of actions subject to the stay. Based on the word "or" separating the two clauses, the clauses appear to operate independently. Taking the latter first, the second clause describes a category of actions—those "to recover a claim." As elucidated above, that category of actions is inapplicable here, because a habeas petition is not a "claim" within the meaning of section 101(5).

The first clause of section 362(a)(1) stays "a judicial, administrative, or other action or proceeding" against the debtor. Those terms are not further defined by the Bankruptcy Code. This Court is not aware of any prior decisions in which a court has directly addressed whether a habeas petition falls within the gamut of section 362(a)(1).⁴ Ostensibly, a habeas petition could fall within the nearly all-encompassing language of a judicial action or other action or proceeding against the Commonwealth. See Collier at ¶ 362.03 (The stay is "drafted so broadly that it encompasses all types of legal proceedings, subject only to the exceptions provided in section 362(b)"). The issue currently before the Court is whether a Title III case under PROMESA, which incorporates section 362(a)(1)'s...